Is NSE 50 Nifty ready for nose dive?

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nifty daily chart has formed head & shoulders pattern and the current price is lingering at neck line of 1900 support,if it breaks that line then the first target would be 1620 levels ,so guys be careful

There is only one side to the stock market; and it is not the bull side or the bear side, but the right side.
Jesse L. Livermore

New Member

Hello Friends... I am Kumar. Joined the group a few days back.. Trade and invest as hobby. My professional field is different..
As far as behaviour of Nifty is concerned, the underlying fact that lots of people and Institutions are presently sitting on a lot of cash needs to be kept in mind.. all waiting for the prices to fall so that they can step in.. Therefore the chances of Nifty receiving support at 1900 are a wee bit low given the current market sentiment... 1620 may be the next support level technically, but my assessment is that the buyers will start trooping in once the Nifty drops another 5% ie around 1800 levels.. I am assessing this purely from the investor psychology point of view.....
Suggestions are welcome

Super Moderator

Before jumping to any conclusions there are two possibilites one should consider:

Current Scenerio: The Nifty is in a downward sloping channel (see attached chart). The Nifty has taken support at the 1900 levels at least 4-5 times in the past 30 days and also 4-5 times in January 2005. Thus the 1900 level is a very important SUPPORT level for the Nifty.

First PossibilityThe Nifty breaks the 1900 level.
This would confirm a downtrend. The likely technical target for the Nifty then would be 1620-1650 levels. This level can be calculated by taking the difference between the 09th March 2005 peak (2183.45) and the 1900 level (equal to 283.45) and substracting it from the 1900 level. This gives us a level of 1616.55.

Second PossibilityThe Nifty bounces back UP from the 1900 level.
This would confirm a sideways trading range for the Nifty and the likely target would be a 38% or 50 % retracement level which works out to be 2006 and 2039 levels.

So which way would the Nifty head?Pull out your charts and post them here with your comments.

Member

Before jumping to any conclusions there are two possibilites one should consider:

Current Scenerio: The Nifty is in a downward sloping channel (see attached chart). The Nifty has taken support at the 1900 levels at least 4-5 times in the past 30 days and also 4-5 times in January 2005. Thus the 1900 level is a very important SUPPORT level for the Nifty.

First PossibilityThe Nifty breaks the 1900 level.
This would confirm a downtrend. The likely technical target for the Nifty then would be 1620-1650 levels. This level can be calculated by taking the difference between the 09th March 2005 peak (2183.45) and the 1900 level (equal to 283.45) and substracting it from the 1900 level. This gives us a level of 1616.55.

Second PossibilityThe Nifty bounces back UP from the 1900 level.
This would confirm a sideways trading range for the Nifty and the like target would be a 38% or 50 % retracement level. This works out to be 2006 and 2039 levels.

So which way would the Nifty head?Pull out your charts and post them here with your comments.

Super Moderator

Member

Well explained and appreciate .
The shares market generally bottom out til month of mid june and as the rains starts from south India and is perfected its timing and six mnthly results of the cos gets to its lustre level and demands settle down and july sees maintainign the same level as of this month as it has to make u curve .I feel the market always have this cyclical order with the index attaining tthe heights and lowest according to interest of global investors and investor confidence .ur explanation is absolutely wait and watch.,is wonderful.
Best regards,
ur Nksagar